A New Year of Republican Mistakes

When it’s nearly time to flip the calendar to January, we take stock of the past 52 weeks and look ahead. It is an annual tradition we encourage all to adopt. Why? It helps you to plan and live intentionally.

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Our wish is that 2011 will be better for most Americans. While we are pessimistic in the short run, for the long term, we remain optimistic. Here’s why:

The year ended with a flourish of editorials and news coverage hailing a resurgent Barack Obama. Republicans rescued him during the lame duck session, agreeing to billions in stimulus pork in exchange for extending the Bush tax cuts. Republicans will live to regret their accommodation.

Incumbent leaders returned to the head of Republican caucuses in the House and Senate. These are the same leaders, who in 2006 and 2008, destroyed the prospects for Republicans. We predict they will continue to appease Obama in the New Year. Their vacillating leadership will alienate disgusted voters and makes Obama look presidential.

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Republicans in Congress showed their disdain for the Tea Party when they rejected the bid of Representative Michele Bachmann to join leadership. She is the best spokesman for Tea Party ideas on the national landscape. Watch as the hard left attempts to marginalize Bachmann as they have attempted with Sarah Palin. Strong conservative women threaten the Left.

The compromise Republicans made with Obama will not spur economic growth. If the tax increases proposed by Obama had been adopted, America would now be headed into a new recession. The compromise legislation should help forestall an immediate double dip, but it will increase hardship when economic restructuring finally is allowed to take place.

Economic growth will remain sluggish at best. Housing prices have not yet hit bottom and will definitely continue falling. Foreclosures will continue unabated and this will pressure the banking system.

The Federal Reserve, under the leadership of Ben Bernanke, has run out of tools to boost the economy. Continued quantitative easing will increase inflation while barely budging the unemployment numbers.

Gasoline will trend upward to nearly $4.00 a gallon, and could even surpass it. Every additional gallon of oil pumped out of the ground is more costly than ever to produce. Rising gas prices will further drag the economy down.

Official Washington is doing its best to co-op the Tea Party movement. Freedom Works now controls much of the movement out of headquarters in Washington D.C. This year will decide if the Tea Party becomes as toothless as the modern conservative movement. Tea Party activists will be better served by thinking for themselves and following their hearts than the political establishment.

The National Republican Senatorial Committee saw to it that at least three leading lights of the Tea Party Movement, Christine O’Donnell, Joe Miller and Sharron Angle were defeated. While the NRSC claimed to be working to help all three, reports on the ground report NRSC recommendations and strategy severely damaged these candidates’ chances. Feeling threatened, we predict the NRSC will be even more aggressive in stopping Tea Party candidates in Republican primaries in 2012.

As for the 2012 battle for the White House, we expect official Republican politicians will be planning to nominate a make- no- big- change candidate like they did in 2008. Of the current crop of front runners, only Sarah Palin or Mike Huckabee will rewrite the rule book. But instead of Palin or Huckabee, insider Republicans by the end of 2011 will be well on their way to nominating for President a Mitt Romney or Governor Haley Barbour.

Yet we are optimistic for the long run because of “Herbert Stein’s Law,” which he coined when he said “If something cannot go on forever, it will stop.”

Deficits will end via a sovereign bond crisis in America. This crisis is already brewing in Municipal bonds. Baby Boomers won’t put up with a cut in entitlement benefits, and American taxpayers are rebelling. A more likely outcome is a direct US Government default or a slow motion default via inflation.

With 2011 ahead, sharpen your pencils, make your plans, and live intentionally.